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Mario Gabelli Buys PSSI - In Medical Takeover Trend

March 06, 2013 | About:
Sally Jones

Sally Jones

49 followers
On Feb. 20, 2013, billionaire investor from the Bronx, GAMCO Investors’ Chairman and Chief Executive Officer Mario Gabelli added PSS World Medical Inc. (PSSI) shares for 252.2%, with current shares at 1,236,326. Current price for PSSI is $11.51, with a 62% decline from average. PSS World Medical Inc. distributes medical supplies and equipment to physicians and healthcare providers in an effort to improve caregivers’ financial performance.

Gabelli’s major add follows the October deal in which McKesson Corp. (MCK), the largest U.S. drug distributor, acquired PSS World Medical for $29 per share in cash with a plan to combine it with McKesson’s medical surgical business. McKesson’s acquisition of PSS World Medical’s distribution of medical products to physician offices and long-term care homes is a gain of the company’s $2.1 billion in annual sales (PSSI), and a cost savings estimated at $100 million a year within four years. Commenting on the savings, The Gabelli Healthcare & Wellness Trust (GRX) fund portfolio co-manager Jeff Jonas stated, “The combined company will be significantly bigger and the $100 million in synergies is reasonable given savings in warehouses, delivery, and slightly better purchasing from the manufacturers.”

At the end of Dec.2012, GRX had net assets of $137 million. This Gabelli Trust is described as “a closed-end, non-diversified management investment company whose investment objective is long-term growth of capital.”

For GRX tangible book value versus price, go here.

PSS World Medical Inc. has a strong track record of return on capital for the last 10 years. The revenue of PSS World Medical Inc. is ranked higher than 65% of the 17 companies in the industry. For EBITDA, PSS World Medica, Inc. scores 11.4, ranking higher than 82% of the 17 companies in the industry where the median is 3.7. For earnings per share, PSS World Medical Inc. rates a 10.2, and is ranked higher than 76% of the 17 companies in the industry where the median is 4.5. PSS World Medical Inc. receives an 0.6 for Peter Lynch Fair Value, and is ranked lower than 71% of the 17 companies in the industry with a median of 1.7. For a detailed analysis of PSSI, go here.

Mario Gabelli’s PSSI Holding History:



Take a look at Mario Gabelli’s holdings here.

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 2.8/5 (5 votes)

Comments

Adib Motiwala
Adib Motiwala - 1 year ago
I am sorry I am a bit confused here. PSS world acquision has been completed. And you are reporting Mario's buy 2 days before the deal completed.

I assume you have an automated template. It seems to be producing incorrect / incoherent language

See below

On Feb. 20, 2013, billionaire investor from the Bronx, GAMCO Investors’ Chairman and Chief Executive Officer Mario Gabelli added PSS World Medical Inc. (PSSI) shares for 252.2%, with current shares at 1,236,326. Current price for PSSI is $11.51,

I don't think that was the price either....

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